Convenience Foods Lanka : Annual Financial Report 2021/22

Rising

to the

Challenge

CONVENIENCE FOODS (LANKA) PLC | ANNUAL REPORT 2021/22

Contents

2-25		28 -40		41 -67
Overview		Our Value Creation Process		Management Discussion
				and Analysis
Our Vision, Mission, Purpose and Values	2	Our Value Creation Model	28	Economic Review	41
About This Report	3	Stakeholder Engagement	30	Industry Review	42
About The Company	5	Identifying Material Matters	32	Financial Capital	43
Year at a Glance	6	Internal Controls and Risk Management	35	Manufactured Capital	46
Key Milestones	8	CFL Impacts	39	Human Capital	48
Performance Highlights	10	Sustainability at CFL	40	Intellectual Capital	54
Steps into a New Chapter	12
		Social and Relationship Capital	57
New Product Launches	13
		Natural Capital	63
Our Products Range	14
Key Communication Campaigns	16
Our Global Markets by Sales Volumes	17
Achievement and Awards	18
Chairman's Message	19
Managing Director's Message	22

70 -101		104 -141
Corporate Governance		Financial Statements
Board of Directors	70	Independent Auditors' Report
Corporate Governance Statement	72	Statement of Profit or Loss and Other
Corporate Governance	73	Comprehensive Income
Annual Report of the Board of		Statement of Financial Position
Directors on the Affairs of the Company	93	Statement of Changes in Equity
Statement of Directors' Responsibilities for	Statement of Cash Flows
Financial Statements	96
Significant Accounting Policies
Responsibility Statement of Chairman,
Managing Director/CEO and		Notes to the Financial Statements
General Manager Finance	97
Audit Committee Report	98
Remuneration Committee Report	100
Related Party Transactions Review
Committee Report	101

142 -152

Supplementary Information

104	Decade at a Glance	142
	Shareholder and Investor Information	143
107	Glossary of Financial Terms	145
108	GRI Content Index Tool	146
109	Notice of Meeting	150
110	Form of Proxy	151
111	Corporate Information	IBC
120

The financial year 2021/22 was a test of our resilience and spirit, with the pandemic and the

emerging economic crisis posing threats to the supply chain and deepening economic vulnerabilities.

Our challenge was to sustain our growth in an environment that was volatile and unsteady

to fulfil our commitments to our consumer and country.

We stayed anchored in stormy environments by staying true to purpose and core values and,

we strengthened the core of our business by supporting our people to adapt to change

and building resilience through good governance and futuristic measures.

Our teams showed extraordinary passion and commitment as they rallied to turn challenges

to triumph with the aim of fulfilling the food and nutrition needs of children, individuals and families.

This was a year that tested our mettle, but we rose to the challenge and emerged stronger.

CONVENIENCE FOODS (LANKA) PLC

Annual Report 2021/22

Our Vision, Mission, Purpose and Values

(GRI 102-16)

Vision

"Total and complete nutrition to enhance the quality of life of future generations"

Mission

"To achieve total consumer satisfaction by maintaining consistently superior quality products that are innovative and nutritious while penetrating new markets to maintain market leadership in a competitive environment"

Group Purpose

"To create enriching moments of happiness for people,

by being a caring global entity, with a true Sri Lankan identity"

Group Core Values

Caring

We are considerate. We respect our stakeholders, community and planet.

Quality

We strive with passion to deliver higher value and satisfaction through our products and services.

Innovation

We constantly explore new possibilities to create happy moments for people.

Integrity

We act honestly, responsibly and ethically.

2

CONVENIENCE FOODS (LANKA) PLC

Annual Report 2021/22

About This Report

(GRI 102-12, 45, 46, 48, 50, 51, 52, 53 & 54)

Welcome to our Annual Report of Convenience Foods (Lanka) PLC (CFL)

"Rising to the Challenge" through which we hope to discuss how we directed our strategy in delivering performance, the value we created and our plans for future value creation. The Report is also designed to showcase how we direct strategy in an integrated manner that balances the often-competing interests of our diverse stakeholders. In selecting the content to be included in this report we have adopted the principle of materiality and structured the discussion based on the material issues which matter most to our stakeholders and our business.

Independent Assurance

Convenience Foods (Lanka) PLC has obtained an independent assurance for the financial statements from External Auditors Messrs KPMG. These reports have been set out on pages 104 and 141, respectively.

Targeted Audience

The Report is aimed at providing Company related information, to our shareholders and potential investors, in order to make informed decisions about the organization's growth, strength, stability, and sustainability aspects. The material matters in this Report also looks to support the information requirements of other stakeholders, including customers, employees, suppliers, business partners, and local communities. We have taken the responsibility for providing mandatory disclosures as well as voluntary information as may be deemed necessary and important by relevant

Scope and Boundary

This Report has a comprehensive coverage of Convenience Foods (Lanka) PLC (CFL) business and operational activities, as well as the risk, governance and sustainability measures that support the achievement of the Company's strategic ambitions, while balancing the expectations of stakeholders. In addition, the Report covers both financial and non-financial data, enabling not only our shareholders but a wide range of stakeholders throughout our value chain, to ascertain the performance of CFL in a number of different forms.

The Report has been prepared using the principles set out in the GRI Standards published by the Global Reporting initiatives, "In accordance" - core guidelines. CFL adopts a 12 months annual reporting cycle and this year's report covers the period 1st of April 2021 to 31st of March 2022. Any material events after this date and up to the Board approval date of 29th July 2022 have also been included.

Our previous Report (Excellence Exemplified) was for the year ended 31st March 2021 and released on the 20th of August 2021.

Reporting Structure

The structure of the report provides an overview of the steps taken to nurture our capitals' though which we deliver value to our stakeholders. We aim to continually improve the quality of our reporting standards and as such, this year's report includes the following added features which were introduced with the intent of enhancing clarity and readability;

• Our stakeholder value creation model.
• Increased strategic orientation in reporting.
• Improved connectivity using navigation icons.
• Careful consideration of relevant and material information.

regulatory and statutory bodies.

Reporting Standards

The following Voluntary Reporting frameworks and guidelines were used to prepare the Report moving beyond regulatory compliance to incorporate international best practices into our reporting processes.

Integrated Reporting:

• International Framework of the IIRC.
• A Preparer's Guide to Integrated Corporate Reporting ICASL.
• The guidelines for presentation of Annual Reports 2021 ICASL.
• Handbook on Integrated Corporate Reporting ICASL.

3